Blog: How a Stablecoin Fueled a Crypto Crash – Barron’s

Bitcoin has a reputation as a volatile cryptocurrency. But losses are piling up in a corner of the crypto market that’s supposed to hold up when everything else tanks: stablecoins.

As their name implies, stablecoins are designed to maintain a fixed value, typically set at $1 per token. The biggest ones, Tether and USD Coin, have held their dollar pegs. But a fast-growing “algorithmic” stablecoin called TerraUSD crashed as low as 23 cents on the dollar this past week, before recovering to 72 cents. The declines wiped out more…

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